Two-tier tobacco market’s ‘multiple benefits’ cited

House Bill 4144 is beneficial to all, a proponent of the measure argued during a recent hearing of the chamber’s committee on ways and means.

“It’s a misconception that HB 4144 only favors one local manufacturer,” Quirino Rep. Dakila Cua said during the hearing.

“Let’s not forget that foreign tobacco companies are also players in the lower-tier market as well,” Cua added.

Buhay party-list Rep. Lito Atienza has also given his support to HB 4144, saying the wisdom in the proposed amendment lies in its “multiple benefits.”

He hypothetically raised that “if we consider the sin tax on cigarettes, we could consider the same for alcoholic beverages like San Miguel Beer and all other intoxicating beverages.”

“Is it possible that the taxation for premium brands like Hennessy XO be the same with local brands like Tanduay or Ginebra San Miguel, to call it a form of unitary tax?”Atienza asked.

He said it would immediately kill local brands because the negligible price difference because of a unitary tax system oversimplifies the problem and develops a bias for products of the rich against products of the less-moneyed sectors of society.

“It’s about time we take a more serious look at sin taxes so that while we promote the objectives of good health, we at the same time raise revenue and discourage smoking. Let us not be unfair to our local industries particularly the farmers and manufacturers,” Atienza added.

A World Health Organization study on Tobacco Tax Administration indicated that a tiered tax system, be it specific or ad valorem, may be an outcome of various political economic reasons, the most common one being protecting domestic products.

Atienza likened the situation to the plight of the Philippine cigar industry where the country used to be number one until a series of measures that ostensibly would have helped them otherwise killed the cigar industry, now earning substantial global revenues, but without our homegrown Filipino brands being able to compete.

“The proposed amendment gives a second look at the economic situation of our farmers, and at the same time, without forfeiting the objective of discouraging smoking since higher taxes means [fewer]smokers. I therefore find logic, justice and fairness [to this measure]and we are definitely supporting it,” he said.